Australia: The most immigrant friendly nation on earth?

Australia had the highest rate of immigration-per-capita in the OECD in 2009. This figure measures inflows of foreign migrants, as a proportion of its own population. This indicates that immigration plays a bigger role in Australian society than any other rich nation. Its only rival is European minnow Luxembourg, a nation more than 44 times smaller than Australia.

Inflows of immigration per capita across the OECD, 2009

The 697,000 immigrants that Australia received in 2009 equated to 3.15% of Australia's 22 million population. For comparison the OECD nation with a population closest to Australia's, the Netherlands, at 16.5 million, received only 104,000 immigrants.

Fellow English-speaking and resource-rich country Canada was also at the upper end of the scale but still well below Australia at 1.88%. The United States, a nation built on long-term inward migration, had a rather low 0.83%.

Inflows of immigration per capita across selected OECD nations, 2000-2009

Australia only overtook Luxembourg in 2009 however has sustained a clear upward trend through the years 2000 to 2009. GFC-suffering Ireland (and Spain) had a heavy downturn in inward migration during the late 2000s, while the United States and United Kingdom sustained their levels fairly consistently throughout the period.

The Australian migration context

Australia is a rich, stable, well-run nation with good infrastructure and strong education and healthcare systems. Its English-speaking characteristic and Asia-friendly distances and timezones make it an attractive destination for migrants around the world. In terms of economic performance, Australian was one of the few rich nations to avoid a recession throughout the GFC. It has maintained relatively strong GDP growth, recently underpinned by a mining boom, low unemployment and low levels of government debt.

The Australian federal government implements various policies to promote immigration. It has a slick immigration system designed to facilitate immigration to satisfy the labour needs of the country. It uses a points system and variety of visas types to ensure the right immigrants are approved. In 2010-11, 32% of Australia's long-term migrants were part of the skilled program, and around 26% were professionals or managers. Further streamlining of the points-based assessment system rolled out on 1st July 2012.

Australia has flexible labour laws that supports casual workers, and working holiday visas designed meet seasonal agricultural labour demands in remote areas.

The Australian Taxation Office supports some migrant-friendly taxation options such as Living Away from Home Allowance (LAFHA). It should be noted, however, that LAFHA is currently being phased out, which may reduce the attractiveness of Australia to some high-skilled workers.

The largest proportion of migrants are Chinese or Indian. Many settle in the CBDs of Australia's largest cities. 79% of the residents of Sydney's CBD, for example, were born outside of Australia. Greater Sydney's and Perth's figure is 41% and Melbourne's is 37%. For Australia as a whole, 30% of its residents are foreign-born.

The economic benefits of migration

The most obvious effect of net-positive migration is an expansion of the economy. More workers means more work which means higher GDP. This increase leads to an increase in tax revenues for the government and an expansion in internal market competitiveness. In terms of per-capita GDP increases, the results of studies vary, but most indicate at least a minimal boost, and none suggest a reduction.

Attracting high-skilled knowledge economy workers also has long-term benefits for the country. These workers go beyond merely satisfying short-term labour shortages and tend to produce a disproportionately high level of productivity, and thus GDP boost. Australia's brain gain is the loss of India, China, the United Kingdom et al.

Sources

World Economic Outlook Database April 2012
Inflows of foreign population into selected OECD countries